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Full title: Motion to Dismiss Case Filed by YouFit Health Clubs, LLC. Hearing scheduled for 6/23/2021 at 10:30 AM at US Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #4, Wilmington, Delaware. Objections due by 6/16/2021. (Attachments: # 1 Exhibit A - Proposed Order # 2 Notice) (Meloro, Dennis) (Entered: 05/27/2021)

Document posted on May 26, 2021 in the bankruptcy, 17 pages and 0 tables.

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The above-captioned debtors and debtors-in-possession (the “Debtors”) hereby move this Court (the “Motion”) for entry of an order, substantially in the form attached hereto as Exhibit A (the “Proposed Order”), pursuant to sections 105(a), 305(a), 349, 363, 554, and 1112(b) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. [Docket No. 735] (collectively, such orders, the “Sale Order”) authorizing the Debtors to sell (the “Sale”) substantially all of their assets to YF FC Acquisition, LLC (the “Buyer”) in accordance with the Sale Order and that certain Asset Purchase Agreement, dated November 10, 2020, by and between the Debtors and the Buyer (as amended from time to time, the “Stalking Horse Purchase Agreement”).This includes certain cash carved out of the DIP Lenders’ and Prepetition Lenders’ Collateral pursuant to the DIP Order and DIP Credit Agreement for the payment of allowed fees and expenses of Professionals for the Debtors and the Committee up to the amounts set forth for each such Professional in its respective line items in the Approved DIP Budget entitled “Professional Fees – Bankruptcy – Creditor Committee,” “Professional Fees – Bankruptcy - Debtor,” “Professional Fees – Bankruptcy – Other,” “Hilco Fee – Completed Deals,” and “Hilco Fee – Deals ‘In-Process’” (collectively, the “Professional Fee Carve Out”) and for winddown expenses, including U.S. Trustee fees as set forth in the line item in the Approved DIP Budget entitled “Bankruptcy – US Trustee,” amounts set forth in the line item in the Approved DIP Budget entitled “Wind Down/ Conversion Expenses,” and other amounts as agreed among the Debtors, the DIP Lenders and the Prepetition Lenders, and the Buyer (collectively, the “Winddown Reserve”).In connection with the resolution of the Committee’s objection to the Sale, the Debtors, the DIP Lenders and Prepetition Lenders, the Buyer and the Committee negotiated the terms of a settlement (the “Committee Settlement”).Paragraph 11 of the Sale Order states, in relevant part, as follows: if no chapter 11 plan is confirmed in these Chapter 11 Cases, without further order of this Court and without further action of any party, upon the conversion of the Chapter 11 Cases to chapter 7, or dismissal of the Chapter 11 Cases, the Committee Avoidance Actions shall be Acquired Assets under the Stalking Horse Purchase Agreement and this Sale Order.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 YOUFIT HEALTH CLUBS, LLC, et al.,1 Case No. 20-12841 (MFW) Debtors. (Jointly Administered) Obj. Deadline: June 16, 2021 at 4:00 p.m. (ET) Hearing Date: June 23, 2021 at 10:30 a.m. (ET) MOTION OF THE DEBTORS FOR ENTRY AN ORDER (A) DISMISSING THE CHAPTER 11 CASES, AND (B) GRANTING RELATED RELIEF The above-captioned debtors and debtors-in-possession (the “Debtors”) hereby move this Court (the “Motion”) for entry of an order, substantially in the form attached hereto as Exhibit A (the “Proposed Order”), pursuant to sections 105(a), 305(a), 349, 363, 554, and 1112(b) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), and Rules 1017(a) and 6007 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”): (a) dismissing the above-captioned chapter 11 cases (the “Chapter 11 Cases”) and (b) granting related relief, including, without limitation, (i) authorizing, but not directing, the Debtors to abandon any remaining Excluded Assets other than Excluded Cash as set forth herein (each as defined in the Sale Order, as defined below), (ii) approving procedures for filing and approving final fee applications and providing for payment of approved fees, and (iii) authorizing, but not directing, the dissolution and winddown of the Debtors. In support of the Motion, the Debtors respectfully state as follows: 1 The last four digits of YouFit Health Clubs, LLC’s tax identification number are 6607. Due to the large number of debtor entities in the Chapter 11 Cases, for which joint administration has been requested, a complete list of the debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list of such information may be obtained on the website of the proposed claims and noticing agent at www.donlinrecano.com/yfhc. The mailing address for the debtor entities for purposes of the Chapter 11 Cases is: 1350 E. Newport Center Dr., Suite 110, Deerfield Beach, FL 33442.

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Jurisdiction, Venue and Statutory Predicates 1. The United States Bankruptcy Court for the District of Delaware (the “Court”) has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). Under Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), the Debtors consent to entry of a final order under Article III of the United States Constitution. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. 2. The legal and statutory predicates for the relief sought herein are sections 105(a), 305(a), 349, 363, 554, and 1112(b) of the Bankruptcy Code and Bankruptcy Rules 1017(a) and 6007. Background 3. On November 9, 2020 (the “Petition Date”), the Debtors each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in this Court. On November 18, 2020, the United States Trustee appointed an official committee of unsecured creditors (the “Committee”) in the Chapter 11 Cases pursuant to section 1102 of the Bankruptcy Code. No trustee or examiner has been appointed in the Chapter 11 Cases. The Debtors have continued in possession of their properties and are operating and managing their business as debtors in possession under sections 1107(a) and 1108 of the Bankruptcy Code. A. Sale of the Debtors’ Assets 4. On December 28, 2020, the Court entered an order [Docket No. 564] and on February 9, 2021, the Court entered a supplemental order [Docket No. 735] (collectively, such orders, the “Sale Order”) authorizing the Debtors to sell (the “Sale”) substantially all of their

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assets to YF FC Acquisition, LLC (the “Buyer”) in accordance with the Sale Order and that certain Asset Purchase Agreement, dated November 10, 2020, by and between the Debtors and the Buyer (as amended from time to time, the “Stalking Horse Purchase Agreement”). The Sale closed on February 18, 2021 (the “Closing Date”). 5. On the Closing Date, the Debtors and the Buyer entered into a certain transition services agreement (the “TSA”) to aid in the smooth transfer of operations to the Buyer. The term of the Transition Services Agreement commenced on the Closing Date and continues for a period ending ninety (90) calendar days thereafter, or such later date as may be agreed among the Buyer and the Debtors in writing (the “TSA Term”). As of the Closing Date, the Debtors did not operate a business or own material assets other than in the limited manner set forth in the TSA. As of the date of the filing of the Motion, the Debtors, the Buyer, and the Committee have agreed to extend the TSA Term to June 4, 2021. 6. Pursuant to the Stalking Horse Purchase Agreement and the Sale Order, the Buyer has until the earlier of (a) the ninety (90) days following the Closing Date and (b) the expiration of the Debtors’ deadline to assume or reject unexpired leases of non-residential real property pursuant to section 365(d)(4) of the Bankruptcy Code, which is currently the earlier of June 7, 2021, or the effective date of the Proposed Plan (as defined below), subject to any and all rights to seek an extension thereof (the “Designation Rights Period”) to designate any executory contract or unexpired lease set forth on Exhibit F to the Sale Order for either (i) assumption and assignment to the Buyer, or (ii) rejection. 7. On May 18, 2021, the Court entered an order extending the Buyer’s right to designate two unexpired leases for assumption or rejection to June 4, 2021. Docket No. 909. All

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other executory contracts and unexpired leases have either been assumed and assigned to the Buyer or rejected. 8. In addition, after the Closing Date, the Debtors retained a limited amount of cash as set forth in the Approved DIP Budget [Docket No. 761] pursuant to, inter alia, the Sale Order, the Final Order Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364 and 507, Bankruptcy Rules 2002, 4001, 6004 and 9014 and Local Bankruptcy Rule 4001-2 (I) Authorizing the Debtors to Obtain Postpetition Senior Secured Superpriority Financing, (II) Authorizing the Debtors’ Limited Use of Cash Collateral, (III) Granting Adequate Protection to the Prepetition Secured Parties, and (IV) Granting Related Relief [Docket No. 231] (the “DIP Order”)2 and the DIP Credit Agreement. This includes certain cash carved out of the DIP Lenders’ and Prepetition Lenders’ Collateral pursuant to the DIP Order and DIP Credit Agreement for the payment of allowed fees and expenses of Professionals for the Debtors and the Committee up to the amounts set forth for each such Professional in its respective line items in the Approved DIP Budget entitled “Professional Fees – Bankruptcy – Creditor Committee,” “Professional Fees – Bankruptcy - Debtor,” “Professional Fees – Bankruptcy – Other,” “Hilco Fee – Completed Deals,” and “Hilco Fee – Deals ‘In-Process’” (collectively, the “Professional Fee Carve Out”) and for winddown expenses, including U.S. Trustee fees as set forth in the line item in the Approved DIP Budget entitled “Bankruptcy – US Trustee,” amounts set forth in the line item in the Approved DIP Budget entitled “Wind Down/ Conversion Expenses,” and other amounts as agreed among the Debtors, the DIP Lenders and the Prepetition Lenders, and the Buyer (collectively, the “Winddown Reserve”). Since the Closing Date, the Debtors used such cash to fund administrative expenses 2 Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the DIP Order.

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as set forth in the Approved DIP Budget and have worked with the Buyer and the DIP Lenders to reconcile amounts that remain after payment of permitted expenses and should be transferred to the DIP Lenders and Prepetition Lenders. B. Combined Plan and Disclosure Statement 9. In connection with the resolution of the Committee’s objection to the Sale, the Debtors, the DIP Lenders and Prepetition Lenders, the Buyer and the Committee negotiated the terms of a settlement (the “Committee Settlement”). See Sale Order, Ex. C, Sched. 1. The Committee Settlement contemplated that certain causes of action, i.e., the Committee Avoidance Actions (as defined in the Sale Order),3 would be either (a) transferred to a liquidating trust for the benefit of unsecured creditors if a plan of liquidation was achievable, see Sale Order, Ex. C., Schedule 1 and Ex. E, or (b) automatically be Acquired Assets upon dismissal of these Chapter 11 Cases. Paragraph 11 of the Sale Order states, in relevant part, as follows: if no chapter 11 plan is confirmed in these Chapter 11 Cases, without further order of this Court and without further action of any party, upon the conversion of the Chapter 11 Cases to chapter 7, or dismissal of the Chapter 11 Cases, the Committee Avoidance Actions shall be Acquired Assets under the Stalking Horse Purchase Agreement and this Sale Order. 10. On January 11, 2021, as part of the plan process, the Debtors filed a motion [Docket No. 622] seeking the establishment of a general bar date of February 22, 2021 and a government bar date of May 10, 2021. On January 20, 2021, the Court entered the Order (I) Fixing Deadlines for Filing Proofs of Claim and (II) Approving the Form and Manner of Notice Thereof [Docket No. 671] which, among other things, set a general bar date of February 22, 2021 and a government bar date of May 10, 2021. 3 This is also defined as the West Central Avoidance Action in the Committee Settlement. See Sale Order, Ex. C, Sched. 1

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11. On February 10, 2021, the Debtors filed the Combined Disclosure Statement and Chapter 11 Plan of Liquidation of YouFit Health Clubs, LLC and Its Debtor Affiliates [Docket No. 744] and the Motion for Entry of an Order (A) Approving the Disclosure Statement on an Interim Basis, (B) Establishing Procedures for Solicitation and Tabulation of Votes to Accept or Reject the Plan, (C) Approving the Form of Ballot and Solicitation Materials, (D) Establishing Voting Record Date, (E) Fixing the Date, Time, and Place for the Hearing on Final Approval of the Disclosure Statement and Confirmation of the Plan and the Deadline for Filing Objections Thereto, (F) Approving Related Notice Procedures and Deadlines, and (G) Fixing a Deadline for Initial Administrative Expense Claims [Docket No. 745]. On March 2, 2021, the Debtors filed the Combined Disclosure Statement and Amended Chapter 11 Plan of Liquidation of YouFit Health Clubs, LLC and Its Debtor Affiliates [Docket No. 788]. 12. On March 4, 2021, the Court entered the Order (A) Approving the Disclosure Statement on an Interim Basis, (B) Establishing Procedures for Solicitation and Tabulation of Votes to Accept or Reject the Plan, (C) Approving the Form of Ballot and Solicitation Materials, (D) Establishing Voting Record Date, (E) Fixing the Date, Time, and Place for the Hearing on Final Approval of the Disclosure Statement and Confirmation of the Plan and the Deadline for Filing Objections Thereto, (F) Approving Related Notice Procedures and Deadlines; and (G) Fixing a Deadline for Initial Administrative Expense Claims [Docket No. 801] (the “Solicitation Procedures Order”). Among other things, the Solicitation Procedures Order established April 12, 2021 as the deadline for the submission of administrative expense claims arising on or after the Petition Date and by or before March 4, 2021 (“Initial Administrative Expense Claims”) and April 22, 2021 as the date for the combined hearing on final approval of

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the disclosure statement and confirmation of the Debtors’ proposed plan (the “Combined Hearing”). 13. On March 11, 2021, the Debtors filed the solicitation version of the Combined Disclosure Statement and Amended Chapter 11 Plan of Liquidation of YouFit Health Clubs, LLC and Its Debtor Affiliates [Docket No. 816] (the “Proposed Plan”) and on March 12, 2021, the Debtors commenced solicitation of the Proposed Plan in accordance with the Solicitation Procedures Order. 14. At the same time, the Debtors also began the process of reconciling administrative expense and priority claims, including, but not limited to, the Initial Administrative Expense Claims, in consultation with the Committee and the DIP Lenders and the Prepetition Lenders. 15. On April 20, 2021, the Debtors filed a Certification of Counsel Requesting Entry of Supplemental Order Regarding the Date, Time and Place for the Hearing on Final Approval of the Disclosure Statement and Confirmation of the Plan, and Related Notice Procedures [Docket No. 865] which sought a continuance of the Combined Hearing to May 25, 2021. Among other reasons, the Debtors sought such continuance so that the Combined Hearing would occur after the passage of the government bar date on May 10, 2021, as the Debtors needed to understand the full scope of claims, especially, but not exclusively, priority claims, before the Combined Hearing. 16. On the same date, the Court entered the Supplemental Order Regarding the Date, Time and Place for the Hearing on Final Approval of the Disclosure Statement and Confirmation of the Plan, and Related Notice Procedures [Docket No. 866] which, inter alia, continued the Combined Hearing to May 25, 2021 at 2:00 p.m. (prevailing Eastern Time).

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17. Thereafter, the Debtors continued the process of reconciling administrative and priority claims, including by engaging in ongoing discussions with the Committee and the DIP Lenders and the Prepetition Lenders. 18. Following the passage of the government bar date on May 10, 2021, and after having taken into account the extent of priority claims that may be due and payable under the Proposed Plan, the Debtors determined, after consultation with the Committee as well as the DIP Lenders and the Prepetition Lenders, that confirmation and consummation of the Proposed Plan is no longer feasible and, therefore, no longer in the best interests of the Debtors, their estates, or their creditors. Relief Requested 19. By this Motion, the Debtors request entry of an order, substantially in the form of the Proposed Order, (a) dismissing the Chapter 11 Cases and (b) granting related relief, including, without limitation, (i) authorizing, but not directing, the Debtors to abandon any remaining Excluded Assets, other than Excluded Cash as set forth herein (each as defined in the Sale Order), (ii) approving procedures for filing and approving final fee applications and providing for payment of approved fees, and (iii) authorizing, but not directing, the dissolution and winddown of the Debtors on the terms set forth in the Proposed Order. Basis for Relief Requested A. The Court Must Dismiss the Chapter 11 Cases Upon a Showing of Cause Pursuant to Section 1112(b) of the Bankruptcy Code 20. Pursuant to section 1112(b)(1) of the Bankruptcy Code, absent unusual circumstances, a court shall dismiss a bankruptcy case for cause. Section 1112(b)(1) states, in pertinent part: [O]n request of a party in interest, and after notice and a hearing, . . . the court shall convert a case under this chapter to a case under

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chapter 7 or dismiss a case under this chapter, whichever is in the best interests of creditors and the estate, if the movant establishes cause. 11 U.S.C. § 1112(b)(1). The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 changed the statutory language with respect to conversion and dismissal from permissive to mandatory. See H.R. Rep. 109-31 (I), 2005 U.S.C.C.A.N. 88, 94 (stating that the Act “mandate[s] that the court convert or dismiss a chapter 11 case, whichever is in the best interests of creditors and the estate, if the movant establishes cause, absent unusual circumstances.”); see also In re Gateway Access Solutions, Inc., 374 B.R. 556, 560 (Bankr. M.D. Pa. 2007) (stating that the BAPCPA amendments to section 1112 limit the court’s discretion to refuse to dismiss or convert a chapter 11 case upon a finding of cause). 21. Section 1112 thus limits a court’s discretion to refuse to dismiss a chapter 11 case upon a finding of cause. See, e.g., In re SCO Grp., Inc., Case No. 07-11337, 2009 Bankr. LEXIS 4731, at *14 (Bankr. D. Del. Aug. 5, 2009) (“Section 1112(b) is clear that the Court must dismiss or convert the Debtors’ case if Movants establish ‘cause’ which is defined in Section 1112(b)(4).” (internal citations omitted)); In re 3 Ram, Inc., 343 B.R. 113, 119 (Bankr. E.D. Pa. 2006) (“Under new § 1112 when cause is found, the court shall dismiss or convert unless special circumstances exist that establish that the requested conversion or dismissal is not in the best interests of creditors and the estate.”). 22. Determinations of whether cause exists are made on a case-by-case basis and the decision to dismiss a chapter 11 case rests in the sound discretion of a court. In re Young, 76 B.R. 376, 378 (Bankr. D. Del. 1987) (“The determination of whether cause has been shown must be made on a case-by-case basis . . . .”). 23. As discussed herein, the Court must dismiss the Chapter 11 Cases because cause exists and dismissal is in the best interests of the Debtors, their estates, and their creditors.

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B. Cause Exists to Dismiss the Chapter 11 Cases Because the Debtors Have Ceased Their Business Operations, Have No Assets Available for Distribution, and Are Unable to Confirm the Proposed Plan 24. Section 1112(b)(4) of the Bankruptcy Code provides a non-exhaustive list of sixteen grounds for dismissal. See 11 U.S.C. § 1112(b)(4)(A)–(P); see also Young, 76 B.R. at 378 (“[C]ause is not limited to the enumerated grounds of § 1112(b).”); 3 Ram, 343 B.R. at 117 (“While the enumerated examples of ‘cause’ to convert or dismiss a chapter 11 case now listed in § 1112(b)(4) have changed under BAPCPA, the fact that they are illustrative, not exhaustive[,] has not.”). 25. One such ground is where a party-in-interest shows that there is a “substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation.” 11 U.S.C. § 1112(b)(4)(A). To demonstrate a continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation, the movant on a motion to dismiss must establish that: (i) there has been a diminution of the value of the estate, and (ii) the debtor does not have a “reasonable likelihood of rehabilitation.” See, e.g., In re Citi-Toledo Partners, 170 B.R. 602, 606 (Bankr. N.D. Ohio 1994) (“Section 1112(b)(1) contemplates a ‘two-fold’ inquiry into whether there has been a continuing diminution of the estate and absence of a reasonable likelihood of rehabilitation.” (internal quotation marks and citation omitted)). 26. Under the two-fold inquiry, the Debtors must first demonstrate that there has been a diminution of value of their estates. See, e.g., Citi-Toledo Partners, 170 B.R. at 606 (finding that accumulation of real estate taxes diminished the value of the estate). Second, the Debtors must demonstrate that they have no “reasonable likelihood of rehabilitation.” See, e.g., Clarkson v. Cooke Sales & Serv. Co. (In re Clarkson), 767 F.2d 417, 420 (8th Cir. 1985) (dismissal warranted where “the absence of financial data and certain sources of income for the [debtors] indicate[d] the absence of a reasonable likelihood of rehabilitation”).

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27. Here, the Debtors satisfy the two-fold inquiry. First, the Debtors have sold substantially all of their assets in connection with the Sale. As noted above, other than in the limited nature set forth in the TSA, which will be terminated when the Buyer’s designation period expires no later than June 4, 2021, the Debtors no longer conduct any business and substantially all of their assets were transferred to the Buyer in connection with the Sale. The value of the estate has, therefore, diminished. 28. Second, there is no business to reorganize. Pursuant to the Stalking Horse Purchase Agreement and the Sale Order, the Debtors transferred substantially all of their assets to the Buyer and ceased operations after the Closing Date. 29. An additional ground is the “inability to effectuate substantial consummation of a confirmed plan.” 11 U.S.C. § 1112(b)(4)(M). As discussed above, although the Debtors made every effort to confirm and effectuate the Proposed Plan, including extensive negotiations and discussions with the Buyer, the DIP Lenders and the Prepetition Lenders and the Committee, the Proposed Plan is no longer a viable path in light of the Debtors’ limited resources. 30. Accordingly, the Chapter 11 Cases should be dismissed due to the substantial or continuing loss to, or diminution of, the Debtors’ estates, the absence of a reasonable likelihood of rehabilitation, and the fact that the Proposed Plan is not feasible or confirmable under the circumstances. C. Dismissal Is in the Best Interests of the Debtors’ Estates and Creditors 31. Once a court determines that cause exists to dismiss a chapter 11 case, the court must evaluate whether dismissal is in the best interests of the debtor’s creditors and of the estate. See, e.g., Rollex Corp. v. Associated Materials (In re Superior Siding & Window), 14 F.3d 240, 242 (4th Cir. 1994) (“Once ‘cause’ is established, a court is required to consider this second

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question of whether to dismiss or convert.”). A variety of factors demonstrate that it is in the best interest of the Debtors’ estates and their creditors to dismiss the Chapter 11 Cases. 32. First, a dismissal of a chapter 11 bankruptcy case meets the best interests of creditors test where a debtor has nothing to reorganize and the debtor’s assets are fixed and liquidated. Camden Ordinance Mfg. Co. of Ark., Inc. v. U.S. Tr. (In re Camden Ordinance Mfg. Co. of Ark., Inc.), 245 B.R. 794, 799 (E.D. Pa. 2000) (finding that “reorganization to salvage” a business that had ceased doing business was “infeasible”). As explained above, the Debtors have nothing left to reorganize, because substantially all of the Debtors’ assets have been sold to the Buyer. And, if a plan of liquidation cannot be confirmed, any assets set aside for the benefit of creditors under such confirmed plan are transferred to the Buyer. 33. Second, the best interests of creditors test will also be met where an interested party, other than the debtor, feels that dismissal is a proper disposition of the case. See, e.g., Camden Ordinance, 245 B.R. at 798; In re Mazzocone, 183 B.R. 402, 414 (Bankr. E.D. Pa. 1995) (factors weighed more heavily in favor of dismissal of chapter 11 case rather than conversion to chapter 7, where debtor and United States Trustee both favored dismissal). Here, the Committee, the DIP Lenders and the Prepetition Lenders understand and do not object to the Debtors’ request to dismiss the Chapter 11 Cases. 34. Finally, dismissing the Chapter 11 Cases is warranted because the alternative—conversion to chapter 7 cases and the appointment of a chapter 7 trustee—would not serve the interests of the Debtors’ estates or their creditors as there are no remaining assets to effectuate a liquidation. See, e.g., Rand v. Porsche Fin. Servs. (In re Rand), BAP No. AZ-10-1160, 2010 Bankr. LEXIS 5076, at *31 (9th Cir. B.A.P. Dec. 7, 2010) (dismissal, not conversion, is in the best interest of creditors where an estate has little to no assets remaining for administration). As noted

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above, pursuant to paragraph 11 of the Sale Order, if the Debtors do not confirm a plan and either convert or dismiss these Chapter 11 Cases, the Committee Avoidance Actions shall be Acquired Assets of the Buyer, leaving nothing for a chapter 7 trustee to administer. 35. Accordingly, dismissal of the Chapter 11 Cases is in the best interest of the Debtors’ estates and their creditors. D. Dismissal of the Chapter 11 Cases Is Also Warranted Under Section 305(a) of the Bankruptcy Code 36. Alternatively, cause exists to dismiss the Chapter 11 Cases pursuant to section 305(a) of the Bankruptcy Code, which provides that: (a) The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if— (1) the interests of creditors and the debtor would be better served by such dismissal or suspension. 11 U.S.C. § 305(a). 37. Dismissal pursuant to section 305(a) is an extraordinary remedy, and such a dismissal is only appropriate where the court finds that both creditors and the debtor would be better served by such dismissal. In re AMC Investors, LLC, 406 B.R. 478, 487–88 (Bankr. D. Del. 2009). Dismissal under this provision is also determined on a case-by-case basis and rests in the sound discretion of the bankruptcy court. In re Sky Grp. Intern, Inc., 108 B.R. 86, 91 (Bankr. W.D. Pa. 1989). 38. For the reasons set forth above, cause likewise exists for dismissal under section 305(a) of the Bankruptcy Code. E. Court Should Authorize Debtors to Abandon Any Remaining Excluded Assets 39. Section 554(a) of the Bankruptcy Code provides that “[a]fter notice and a hearing, [a debtor] may abandon any property of the estate that is burdensome to the estate or that is of

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inconsequential value and benefit to the estate.” 11 U.S.C. § 554(a). In addition, section 105(a) of the Bankruptcy Code provides that “[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code].” 11 U.S.C. § 105(a). Bankruptcy Rule 6007 further provides that a debtor may abandon property of the estate by giving notice of the proposed abandonment to certain specified parties and allowing parties in interest to object to the proposed abandonment. See Fed. R. Bank. P. 6007. 40. As noted above, the Debtors sold all of their assets, other than Excluded Assets, to the Buyer. The Debtors do not believe that any remaining Excluded Assets are material or of any significant value to the Debtors’ estates or their creditors. The Debtors therefore seek authority to abandon all such Excluded Assets other than Excluded Cash. To be clear, the Debtors do not seek to abandon any Acquired Assets, including any Acquired Assets held by the Debtors (including any Cash or any Committee Avoidance Action which shall automatically be an Acquired Asset upon dismissal of the Chapter 11 Cases without further order of this Court and without further action of any party) or third parties (such as a deposit, including any utility deposits, or surety bond, including surety bond cash collateral for the Texas and Rhode Island clubs and letter of credit collateral for the Philadelphia club). 41. Accordingly, the Debtors submit that the abandonment of any remaining Excluded Assets is necessary, prudent, and in the best interests of the Debtors’ estates and creditors. F. U.S. Trustee Fees, Professional Fees, and Remaining Winddown Reserve 42. The Debtors will pay any remaining U.S. Trustee fees in full before dismissal. 43. In addition, the Debtors request that the Court (i) schedule a hearing for final approval of any fees and expenses incurred by the Professionals (the “Final Fee Hearing”), and (ii) require the Professionals to file final requests for allowance and payment of all fees and expenses incurred during the Chapter 11 Cases (the “Final Fee Applications”) not later than

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twenty (21) days prior to the Final Fee Hearing with any objections to the Final Fee Applications be filed and served on counsel for the Debtors, counsel for the Committee and on the Professional whose fees are being objected prior to the Final Fee Hearing. 44. The Debtors propose that, upon entry of the order approving this Motion, the Debtors shall transfer all remaining Cash to the Buyer other than the Professional Fee Carve Out and the Winddown Reserve. 45. One week prior to filing the Certification (as defined below), the Debtors shall provide the Buyer with a reconciliation of all funds expended to date under the Approved DIP Budget, including any amounts estimated to be paid through the date of dismissal (the “Reconciliation”). Immediately prior to filing the Certification, the Debtors shall transfer all remaining funds to the Buyer, including all Cash and Excluded Cash, net of any outstanding checks, wires or other pending debits. G. Certification 46. The Debtors further request that the Chapter 11 Cases be dismissed effective immediately upon the Debtors filing a certification of counsel (the “Certification”) substantially in the form annexed as Exhibit 1 to the Proposed Order. The Certification will verify that (i) all quarterly fees of the U.S. Trustee fees have been paid in full, (ii) each of the Professionals have been paid the allowed amounts under the Final Fee Applications for their respective allowed fees and expenses to the extent of available funds in the Professional Fee Carve Out and Winddown Reserve in accordance with the Final DIP Order, (iii) the Reconciliation was provided pursuant to the terms of the Proposed Order and (iv) the Debtors have turned over net cash to the Buyer pursuant to the terms of the Proposed Order. 47. The Debtors propose to serve the Certification on the general service list established in the Chapter 11 Cases in accordance with Bankruptcy Rule 2002, including the U.S. Trustee,

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without serving the Certification on the entire matrix of creditors or all parties in interest in the Chapter 11 Cases, as such parties will receive reasonable notice of the proposed dismissal through notice of the hearing on the Motion. Notice 48. Notice of this Motion has been given to the following parties or, in lieu thereof, to their counsel, if known: (a) the Office of the United States Trustee for the District of Delaware; (b) counsel to the Debtors’ prepetition and postpetition lenders and administrative and collateral agent and Buyer; (c) counsel to the Committee appointed in the Chapter 11 Cases; (d) any party that has requested notice pursuant to Bankruptcy Rule 2002; and (e) the creditor matrix. The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. No Prior Request 49. No prior request for the relief sought in this Motion has been made to this or any other court. Conclusion WHEREFORE, for the reasons set forth herein, the Debtors respectfully requests that this Court approve the relief requested in this Motion and grant such other and further relief as is just and proper. [Remainder of This Page Intentionally Left Blank]

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Dated: May 27, 2021 GREENBERG TRAURIG, LLP /s/ Dennis A. Meloro Dennis A. Meloro (DE Bar No. 4435) 1007 North Orange Street, Suite 1200 Wilmington, Delaware 19801 Telephone: (302) 661-7000 Facsimile (302) 661-7360 Email: melorod@gtlaw.com -and- Nancy A. Peterman (admitted pro hac vice) Eric Howe (admitted pro hac vice) Nicholas E. Ballen (admitted pro hac vice) 77 West Wacker Dr., Suite 3100 Chicago, Illinois 60601 Telephone: (312) 456-8400 Facsimile: (312) 456-8435 Email: petermann@gtlaw.com howee@gtlaw.com ballenn@gtlaw.com Counsel for the Debtors and Debtors in Possession

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